The space is currently controlled by three substantial companies, as well as many minor participants. However, perceived potential for returns is driving investors to consider deploying significant capital into the space; this trend would theoretically result in an increase in the number of players and perhaps minimize the market share of the predominant participants.
As the amount of data demanded is rising rapidly, the current rate of consumption will result in IP traffic exceeding the 1000 Exabyte threshold, the equivalent of the memory of more than 10^20 iPhones, by 2016. Moreover, the data demanded by mobile users will account for more than fifty-percent of the total traffic by the same year. In 2018, the gross global internet traffic will be 64 times the volume of gross global internet traffic in 2005. Investors are aware of these trends, and they are reacting accordingly.
The increase in data demand will have a remarkable effect on investors in real estate. In August, the IRS announced that it would allow certain companies investing in telecommunications assets to possibly qualify for REIT status. Although these announcements do not ensure that the space will expand in the future – past announcement are not used as precedent for future decisions – they indicate an inclination to enable an expansion in the definition of real estate.
